Definition ∞ A recurring revenue test is a financial assessment used to determine if a business or project generates consistent and predictable income streams over time. In the digital asset space, this could apply to protocols with fee-generating mechanisms or services with subscription models. It helps evaluate the sustainability and viability of an economic model.
Context ∞ The application of a recurring revenue test is becoming more relevant for evaluating the long-term sustainability of decentralized applications and digital asset ventures. Investors and analysts increasingly scrutinize protocols for stable income generation beyond speculative token appreciation. This metric aids in differentiating robust projects from those reliant solely on transient market sentiment.
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